Fitch Ratings affirms its 'AA' rating on the following --
In a release on
The bonds are secured by an unlimited ad valorem tax pledge levied against all taxable property within the district. The bonds are additionally secured by the
Key Rating Drivers
Sound Financial Performance: Management's conservative budget practices result in typically positive financial performance. The district maintains sound liquidity and reserves.
Diverse Regional Economy: The district benefits from its close proximity to the strong and diverse
Maturing District with Stable Growth: Previously rapid population growth has slowed as the district approaches build-out. Tax base gains have been steady.
High Debt Levels: The debt profile is characterized by high overall debt levels and moderately slow amortization.
Strong Fundamentals: Fitch expects the district to retain its strong financial position to counterbalance concerns over the high overall debt level.
Pearland ISD is located just south of
Management Practices Support Healthy Financial Profile
The district maintains a sound financial profile with general fund reserve levels in excess of its formal fund balance policy. The district's policy is to maintain reserves equivalent to three months (25 percent) of expenditures, which Fitch views as prudent. Audited results for fiscal 2012 reflect a surplus of
The audited 2013 financials covered 10 months due to a change in fiscal year end, during which the district took advantage of favorable budget performance for non-recurring capital expenditures. Operating results still exceeded budget for an audited surplus of
The district is expected to outperform its budgeted
The district is located in a rapidly growing residential and commercial area of the Houston MSA, with access to major transportation arteries and the nearby
TAV growth occurred at a compound annual rate of 0.6 percent over the past five fiscal years, holding stable through the recession. Fitch believes that management's projections for 1 percent-3 percent increases over the near term are reasonable considering some residential and commercial development underway.
Enrollment trends have slowed in tandem with TAV, and the district's external demographer projects that the district will reach build-out around 2023-2024. District schools have sufficient capacity in excess of projected enrollment at build-out.
Elevated Debt Ratios; Other Long-Term Liabilities Manageable
The district's overall debt burden of
Fitch expects that results of a 2013-2014 facilities study will inform the district's preparation of a capital improvement plan. The district maintains
Retiree pension benefits are provided through the Teacher Retirement System of
TRS is adequately funded at 81.9 percent as of
The judge reopened the lawsuit in
Additional information is available at 'fitchratings.com'.
In addition to the sources of information identified in Fitch's Tax-Supported Rating Criteria, this action was additionally informed by information from Creditscope,
--'Tax-Supported Rating Criteria' (
--'U.S. Local Government Tax-Supported Rating Criteria' (
U.S. Local Government Tax-Supported Rating Criteria
Tax-Supported Rating Criteria
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Fitch Ratings affirms its 'AA' rating on the following